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RE: LOW-LIFE DOWNVOTING MEMBERS
The FDIC is an agency of the Federal Government. In reality, it can never go broke. All FDIC insured accounts will get their money back in case of a bank failure. That's the whole point
"If you promise people their money, but don't actually have enough money to pay them (if only 10% of customers close their accounts and cash-out, the bank is done-for) then you're running a ponzi-scheme."
No, that is not by any means a ponzi-scheme. Not being able to pay out deposits due to the normal course of business does not constitute a ponzi-scheme. It would only be a ponzi scheme if the bank was originally setup to take deposits, with no intention of ever returning them, or ever paying interest on them as advertised.
It can however, run out of "cash-on-hand".
Why do you think they went insane printing money in QE1, QE2, QE3, QE4?
Did you know we're currently in an "unofficial" QE5?
"It can however, run out of "cash-on-hand"."
That is true! But as we know, it does not take long to start up those printing presses. Of course that it not a good thing because it simple deflates the value of the dollar. The alternative is of course to borrow more money, and that is perhaps even worse in the long run, depending on where we borrow the money from.
PS. Speaking of money, thanks for delegating the voting power. I shall try and manage it wisely. :)
I've been lucky enough to find at least a handful of people who seem reasonable and willing to engage in civil conversation.
If I undelegate at some point, don't take it personally, I probably just have other priorities demanding my attention.
I believe delegating is vastly superior to casting my below-minimum-payout vote around.
But that's exactly what a BANK does.
You accrue interest on paper, but the bank never has enough capital to cover that paper.
A few people can get out ahead (just like a casino, even Bernie Madoff had a few customers that withdrew huge profits), and by doing so "prove" that "the system works", but just like a casino, they eat you up with fees, and they'll even hold your funds if you try to withdraw any amount greater than a couple thousand bucks (the "Bank Secrecy Act" makes this even worse).
That's actually one of the most attractive aspects of steem (and crypto generally), namely that I can send tokens of value to whomever I wish, whenever I wish.
Notes on the Bank Secrecy Act,
It has been amended several times, including provisions in Title III of the USA PATRIOT Act, which amended the BSA to require financial institutions to establish anti-money-laundering programs by establishing internal policies, procedures, and controls, designating compliance officers, providing ongoing employee training, and testing their programs through independent audits.[4] WIKI
"You accrue interest on paper, but the bank never has enough capital to cover that paper."
That is true, but aren't a lot of things setup that way? Technically they have no means to fully comply with their obligations at any given time. And that reminds me of fitness clubs. Take your local fitness club for example, that can perhaps facilitate 100 or so members at any given time, yet those clubs will often sell 1000s of memberships. Imagine if all those members showed up at one time!!! :)
Good example.
I believe there have been some proposals to keep clubs from charging a customer if they don't show up for 31 days.
If your business model relies on charging people for ZERO services, you are running a scam.
"If your business model relies on charging people for ZERO services, you are running a scam."
But isn't that exactly what Steemit is doing? What benefits (or services) do the vast majority of Steemit members gain from their investments? I would venture to say...Nothing! No other significant public forum requires members to invest money in the platform. True, you can get most of your money back, but only after waiting a total of 13 weeks, and only then if the value of your Steem investment does not drop significantly before you have a chance to trade or cash it in.
Is Steemit a a ponzi-scheme? Perhaps! Different people no doubt have different views on that.
Is Steemit a Scam? I believe that it is because the vast majority of members do not fully understand what the platform entails, primarily because that is not clearly explained for the layman to understand. Sure the facts may be embedded somewhere within Steemit's FAQs and so on, but as I am sure you will admit, they are not spelled out in plain for most to understand, and certainly not for those whose first language is not English.
Is Steemit an unethical business model? Absolutely! Most certainly! There may be no other platform like it, and I think that is for good reason. First of all, no honest person or company would ever develop a system like Steemit has done. It just would not happen! And secondly, it is simply not a sustainable business model. You can;t keep paying out money (no matter how small) without incoming revenue. Even Steemit has been forced to admit that with it's near bankruptcy last year, and the layoff of 70% of its staff, and other cost cutting measures, such as drastically reduced payouts and so on.
Permanent web hosting.
"Permanent web hosting."
Not at all! As long as the vast majority of Steemit members can have their posts downvoted and hidden, and their reputations ruined by a few slimballs, nothing is permanent. Steemit offers absolutely nothing of value to anyone except to a very select few at the top of the pyramid.
Even if your post is heavily downvoted and your rep is (-77), your posts can still be viewed.
Nobody can erase them, they're coded into the blockchain.
That may be true! But without a positive reputation and significant SP, your votes mean nothing, nor can you ever make even the smallest amount of money.
No capital investment is required.
No other significant public forum offers free permanent web hosting and 100%transparency (blockchain FTW!!).
Sure you can get downvoted, but you know who did it.
If you get flagged (insta-banned) on yo.tube or fa.cebuk or pa.ypal, you have ZERO recourse.
ZERO. You don't know who did it, you have no way of asking them, and you have nobody to request help from.
Oh please....
"No capital investment is required."
Sure there is! Without an investment in Steem, there is virtually nothing you can do on Steemit.
"No other significant public forum offers free permanent web hosting and 100%transparency (blockchain FTW!!)."
Neither does Steemit! "free permanent web hosting" is totally useless if you have zero reputation, and your posts and comments keep getting downvoted and hidden. That is not free web hosting! As for 100% transparency...So what? Knowing something is not a solution, nor is there any mechanism at Steemit to find and carry out a solution once the problem is known.
"Sure you can get downvoted, but you know who did it."
Knowing who did it makes little if any difference, as long as nothing is done about it, and they are allowed to continue downvoting, hiding posts, and ruining reputations.
"If you get flagged (insta-banned) on yo.tube or fa.cebuk or pa.ypal, you have ZERO recourse. ZERO. You don't know who did it, you have no way of asking them, and you have nobody to request help from."
And what recourse do the vast majority of members have on Steemit? ZERO!
Have all those members I listed who are engaged in little more than downvoting other members been removed from the Steemit platform? I didn't think so! So where is the recourse? There isn't any!
You can easily identify users with high-rep and post thoughtful comments to get their attention.
I've actually been very impressed with high-rep users responsiveness.
I've received several non-boilerplate replies from ura-soul, crypto.piotr, themarkymark, and even gooddream.
Socky and me-tarzan even gave me MASSIVE upvotes!
"You can easily identify users with high-rep and post thoughtful comments to get their attention."
Perhaps, but I find that even the most positive of comments rarely get votes from high-reputation authors. They simply do not engage in upvoting those with lower reputations than themselves.
"I've actually been very impressed with high-rep users responsiveness."
Then, congratulations! You are indeed the exception to the rule. As I stated above, it is very rare that higher reputation members will ever upvote those with lower reputations than themselves...very rare indeed. It simply does not happen very often.
That's the beauty of the blockchain. Nobody can be banned. Nobody can stop you from sending or receiving direct transfers or delegations of steem.
Your bank can flag you and freeze your account (real cash-money-dollars) at any time and for any reason, they don't have to explain it to you and they don't even have to charge you with a crime.
Pa.ypal can also kick you off their platform (permanently, they have your ID) and freeze your funds for 6 months and nobody can even ask why.
"That's the beauty of the blockchain. Nobody can be banned."
No, there is no beauty in that! In fact, the fact that nobody can be banned is one of the biggest flaws with the Steemit platform. Without the ability to ban abusers, Steemit is turning into a cesspool of undesirable activities, not the least of which is all the porn that the system is attracting, all of which is a huge deterrent against finding new members, at least those with reputable standards.
"Your bank can flag you and freeze your account (real cash-money-dollars) at any time and for any reason, they don't have to explain it to you and they don't even have to charge you with a crime."
That is simply NOT true! There are many safeguards in place to prevent that from ever happening, at least with any kind of a reputable bank.
"Pa.ypal can also kick you off their platform (permanently, they have your ID) and freeze your funds for 6 months and nobody can even ask why."
I fully support PayPal and what it does...it is by far the most widely used and without exception, THE safest payment gateway on the planet, bar none.
What would be your wish-list of key design features if you had the resources to design your own social-network with exchangeable value-tokens?
Build a system where...
Articles cannot be downvoted by others, regardless of reputation. Allow only upvoting of articles and comments. That way the articles with the most votes will truly be the best articles. As it now stands with Steemit, there is no correlation between an article's quality and the net votes it receives since downvoting by high-reputation members carry such a huge weight.
All votes carry equal weight. Votes of a higher-reputation members should not carry more weight than those of lower-reputation, simply because reputations on Steemit are bought rather than earned. That is a major flaw with the Steemit platform.
Curator payouts are equally divided among all curators, and not simply favor those with higher reputations and more steem power.
Porn is completely from the site, as does Google, Facebook, Instagram, Seeking Alpha, and all other reputable platforms. Allowing porn degrades any platform to the point where most members will simply abandon it. It's just a matter of time.
...there are many others I could give, but I think you can get the point form those. Steemit is simply not an enjoyable or desirable place to be, and will likely not survive much longer regardless of the success of the Steem blockchain or Steem coins.
What enforcement mechanism would you propose?
"What enforcement mechanism would you propose?"
The same mechanisms that other platforms use: A combination of bots and member flagging/reporting, and of course the ability to actually remove the post, NOT just hide it.
Articles cannot be downvoted by others, regardless of reputation (sounds good but we need some enforcement mechanism to remove scams and illicit material).
All votes carry equal weight (this should be a no-brainer, but we would need some sort of automated "proof-of-brain" and protection against people controlling hoards of sock-puppets).
Curator payouts are equally divided among all curators (lowering the minimum payout to 0.001 steem and removing the "timing" bonus would fix this).
Good ideas!
"but we need some enforcement mechanism to remove scams and illicit material"
Yes, we would need the ability to actually remove posts, not just hide them.
"but we would need some sort of automated "proof-of-brain" and protection against people controlling hoards of sock-puppets)"
That could be accomplished by limiting the number of votes any member can make within a given time period, and perhaps even start charging steem to menbers who go over a certain limit. It would also be a good idea to limit memberships to only 1 per person. This can be easily accomplished in a number of ways, such as through the tracking of IP addresses, Google 2FA Authentication, and so on.
This is only "true" technically. If they actually handed out that much cash, inflation (liquidity) would be through the roof and your cash-money-dollars would be next-to-worthless.